Posts Tagged ‘retail’

Recession has lead to several new business models and growth opportunities. That is the beauty of economic changes – there is innovation and new business models come about.

I subscribe to several invitation-based sites. They are supposed to be invitation-only, but popular blogs have their own invites for readers. GiltIdeeliRue La LaHaute LookBeyond the RackBillion Dollar BabesThe Top Secret, and Modnique. All these sites sell designer brands at discount prices. The benefit to designer brands is that they can get rid of previous season’s excess inventory without having to dilute their brand by making discounted prices available only through select sites. The sites do an excellent job of bringing less known brands to customers. I have come across several new brands and discovered gorgeous fashion. The sites purchase products and re-sell them, so it requires capital investment and strong partnerships with good brands that encourage customers to sign up. But capital investment is relatively lower because it is primarily online, and just has one store to manage without hefty real estate charges.

Gilt is my favorite – I love its photography, and the look and feel of the site and products. However, I have never made a purchase through Gilt – for one, products sell out quickly; two, it is higher end than other brands. Its extremely innovative though and has branched out into men, home, kids, travel, and now city-related. I am curious to see what more is in store (pun intended!).

I have purchased from Ideeli, Rue La La, and Billion Dollar Babes. I don’t like paying for shipping, but all these sites charge a hefty shipping rate. Being in retail, I know that all shipping charges have a profit margin included. Its not fair to the customer. In addition, shipping rates do not vary by the size of the package. Rue La La charges almost $10 for shipping – wonder how much margin that has!

Ideeli is running a campaign with MasterCard – the site links to a MasterCard marketplace and if you make a purchase using MasterCard you can get upgraded to the 1st Row for 1 month at no extra charge. Quite innovative! I think usually upgrading to the 1st row comes at a price. Sales are first made available to 1st row members, and 2nd row members have low priority.

Rue La La has been experimenting with gorgeous photography. I particularly love the items with tropical blue background – they used that for summer items, and I felt the ocean and beach calling me just by looking at the gorgeous photography.

Beyond the Rack is my least favorite site. It is too “rock & roll”, and I am sure appeals to a certain set of customers.

Gilt launched Gilt Fuse last year and I saw paid search ads for that as well. It catered to a younger audience. However, you could find the same sales on Gilt Women and more, and Fuse was just a subset of Gilt Women. I am not sure what the business idea was especially since Fuse was just a subset, but it was closed down this year since apparently other customers felt like I did, that having Fuse separately did not make sense. I have been reading that Gilt sells through its mobile app as well, and customers actually make a purchase on their phones. One of my favorite blogs, nymag.com, did a write-up about how Gilt included selected customers in a “special program” if customers spent a certain amount on their site. (I don’t recall details). Customers wrote comments that Gilt was misleading its customers; they did not spend that much and yet were included in that special program. Ha… welcome to the age of the Internet!

In terms of marketing, the sites cannot use the traditional forms of direct marketing. You cannot run paid search and affiliate programs for sites that are invitation-based. You can run behavioral targeting and retargeting ads, as well as online advertising campaigns. The big focus, however, is on PR – blogs, social networks, partnerships, innovation, diversification, and working closely with brands to find the right product mix.

Are these sites in it for the long run? Yes, I think so. But I also see these sites as becoming “commoditized”. I see sales run on two different sites for the same brand, IN THE SAME WEEK! So Sweet Pea’s cute floral mesh tops were available on Ideeli early this week and I actually bought one top; today the same brand is running its sale on Rue La La. The products are different though – for now. You can’t blame the brands though – clearly they are trying to find the right partner, and want to diversify. But what does this imply for these sites? I enjoy following these sites, and am curious to see how many more will jump in to make money while the industry is still lucrative, and how long it will take for the industry to mature.

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Black Friday

After a lot of pent up demand, people are buying, and buying like crazy. Retail sales are back up, and holiday looks promising. But I think people are buying earlier rather than later, and its just a shift in sales from Dec to Nov, not an increase in sales from last year. Every night after midnight I await the numbers and look into each vendor’s interface. There are always problems with some partner or the other – always problems. No matter how much you plan for the biggest day of the year, things can go wrong. A partner’s site crawler is not working so their sales are down, and I have to email them to make sure everything is in order fast. Emails go back and forth during weekends to make sure everything is working. Its exciting to have a good holiday. We plan and plan for this time. After a VERY tough year, I hope to make my numbers.

Black Friday is the day after Thanksgiving when stores expect a big rush of people looking to buy Christmas presents. Electronics and toys have the highest demand – everyone wants to buy before they go out of stock or show up on ebay at a higher price. The hottest toy this year is a $10 hamster that runs or crawls or something.

The biggest day for e-commerce is Cyber Monday, the Monday after Thanksgiving when people come to work and shop. Yeah people shop and its widely accepted. Retailers time their deals around this week, because this week determines how good or bad holiday is/will be. There is such a mad rush in stores, and online IT works hard to keep the site from going down due to the traffic. This year many stores like Walmart opened at midnight on Thanksgiving to keep traffic manageable. Last year a Walmart employee was injured and died in a stampede on Black Friday, so they had to plan well this year. Its absolute madness! I cannot wait to see what sales will look like on Monday – will people buy more then?? Last year it was a big big day for me, not sure this year because people are already buying tons.

I went to Nordstrom today — my fav fav store — it wasn’t that busy. It was annoying to have so many salespeople come and offer to help. After one person came to me thrice, I ignored her and told her if I need help I will ask her. Do they get a commission or something? One salesperson held the clothes at the counter instead of leaving it outside the fitting room like they usually do, because she wanted to ring me up at the counter. Definitely commission. I didn’t see any Black Friday deals though, but did find some good stuff.

In my company, I got leggings for $5!!! Ha, $5, without my associate discount. You gotta love my company – the best prices!!

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Big designers slumming it

Ok so the word “slumming” was inspired from Slumdog Millionaire, and not used literally. But really I have been seeing sales from Oscar De La Renta, Roberto Cavalli, Catherina Malandrino, and many other upscale designers. And when I say sale I mean over $3K gowns from Oscar for just $500-$700, $700 top from Cavalli for around $200. These are all sales through invitation-only sites such as Top Secret, Rue La La, and Gilt Groupe. Gorgeous leopard-print gown from Cavalli, equally gorgeous shoes, all at big discounts.

I have seen someone wearing the tiger print dress below… can’t remember.



Not that I would buy online. For someone who sells clothes online, I really cannot buy clothes and shoes online. I hate paying for shipping when I can buy in-store, and I never know how clothes and shoes will fit. I once purchased Victoria’s Secret clothing online, and the garments were the most ill-fitting and did not live up to the photos online. I was disappointed and did not return them in time. Now they are gathering dust in some corner of my closet. I never bought anything from VS again, despite their “Free shipping free returns to try our pants” email. Never again! But their lingerie in stores is excellent and to-die-for. The only other time I bought shoes online was when I saw a gorgeous pair of Skechers flip-flops and my favorite color was only available online. But who knows, with the coupons and deals available online, I may just change my mind!

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